Sanjeev Sanyal
says:
“One part of the
world runs large deficits for a prolonged period, creating demand; another part
of the world runs surpluses, financing its counterparts’ deficits. This was
true of Roman-Indian trade in the first and second centuries…. The Romans had
to debase their coins, owing to the continuous loss of gold to India.”
I assume that
what happened there was that the Romans found they had an inadequate monetary
base (i.e. gold) and so resorted to making the base semi-fiat. I.e. gold coins
adulterated with other metals were deemed to have the same value as the earlier
pure gold coins.
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